Current Problem With the Way Money Works
The current problem with all our money is that it depends on trust in a third party for its value. As history has shown, this kind of trust is not ideal.
The discussion of how to form a better, more stable form of money is not new. Individuals have been talking about creating a new form of money long before Satoshi’s whitepaper ever came along.
This article will attempt to distinguish the three current forms of money in society and highlight which is the ideal one.
Fiat (Government) Currency
Fiat money, or currency, is money issued by the government and regulated by a central authority (usually a central bank). It is called “fiat” because a government decree/regulation has declared it as legal tender.
Fiat money is not backed by anything. All currencies in the world were at one time backed by gold, but in 1971 President Nixon took the world off from this “Gold standard.”
While there are many advantages of fiat money for regulators and governments, there are also many disadvantages as well.
